The Office of the Comptroller of the Currency (OCC) recently took a decisive step forward by releasing a detailed notice of proposed rulemaking to put the Guiding and Establishing National Innovation for U.S. Stablecoins or GENIUS Act into practice. The 376-page proposal outlines operational standards for payment stablecoin issuers under the agency’s supervision and explicitly invites a 60-day period of public input to refine the emerging federal regime.
Enacted on July 18, 2025, and signed into law by President Donald Trump, the GENIUS Act represented the first comprehensive federal legislation governing dollar-pegged stablecoins.
It established clear guardrails requiring 100% reserve backing with high-quality liquid assets—primarily cash and short-term U.S. Treasuries—along with mandatory monthly disclosures, prompt redemption rights at par value, and strict limitations on issuer activities.
By creating a tailored licensing and supervisory pathway for both bank-affiliated and certain nonbank entities, the statute aimed to foster responsible innovation while mitigating risks to consumers and financial stability.
This latest OCC initiative builds directly on that foundation, proposing a new regulatory part (12 CFR Part 15) that addresses permissible activities, reserve asset composition, mandatory redemption timelines (generally within two business days), proper risk-management protocols for operational, cybersecurity, and third-party exposures, as well as audit, reporting, and examination requirements.
It also introduces a minimum $5 million capital floor for newly chartered issuers and tailored liquidity standards calibrated to each entity’s risk profile. Separate provisions will handle Bank Secrecy Act, anti-money laundering, and sanctions obligations in coordination with the Treasury Department.
The proposal arrives amid notable momentum in digital asset policy under the Trump Administration.
Since taking office, the administration has prioritized regulatory clarity over enforcement-first approaches.
Early executive actions established a Strategic Bitcoin Reserve and a presidential working group on digital assets, while agencies rapidly withdrew restrictive guidance from prior years.
Banks received explicit confirmation of their authority to engage in crypto custody and related services, and the GENIUS Act itself was hailed as a cornerstone achievement positioning the United States as the global leader in responsible digital finance.
Broader market-structure discussions continue, signaling steady progress toward a coherent national framework that balances innovation with prudential safeguards.
Yet significant challenges persist, most prominently the contentious debate surrounding stablecoin yields.
The GENIUS Act explicitly prohibits issuers from paying interest or any form of yield tied solely to holding the tokens, a measure designed to prevent stablecoins from functioning as deposit substitutes.
However, industry participants have highlighted potential workarounds through exchanges or affiliates that offer rewards or staking-like returns to users.
Banking groups, including the American Bankers Association, warn that such arrangements could trigger substantial deposit outflows—potentially in the trillions—undermining banks‘ ability to extend credit to households and businesses.
Crypto advocates like Coinbase CEO Brian Armstrong now counter that competitive yields are essential for adoption and innovation, arguing that overly restrictive rules could drive activity offshore and erode dollar dominance in digital markets.
The OCC proposal acknowledges these evasion risks and outlines presumptive indicators of indirect yield payments, but the issue remains a flashpoint requiring further stakeholder input and possible legislative clarification.
As the comment period unfolds, the OCC‘s effort underscores a maturing regulatory environment.
By encouraging broad participation, policymakers seek to resolve lingering uncertainties and ensure the stablecoin ecosystem strengthens rather than strains the broader financial system.
Successful implementation could further accelerate mainstream integration of digital payments, reinforce US technological leadership, and possibly set a global benchmark—provided remaining tensions around stablecoin yields and competitive dynamics are thoughtfully addressed.